799 Sq Ft Retail Space - How much do you recommend negotiating for increase on CAM ?

[Margot Weatherford]

3 year lease 

How much should I as tenant recommend to increase annual CAM fee? 799 sq ft space

[Evan Polaski]

@Margot Weatherford, I am confused by this question.  As Melanie noted, true CAM costs (but really NNNs) are billed based on actuals.  The monthly "CAM fee" is an estimate you are paying.  Think of it like the escrows you likely pay your mortgage servicer for Insurance and Taxes, or your estimated taxes to IRS.  At end of year, they true up.

What I would be negotiating is both a lower monthly CAM (why give landlord an interest free loan) AND a cap on what you will pay in any given year or for what.  It has been a while since I was dealing with retail leases, but let's assume roof is replaced during your tenancy.  Some landlords may charge you the amortized cost each year, but some may try to push full expense on you this year.  Given the roof is likely a 25+ year life, and you are likely on a 5 yr term, you should not be paying for all 25yrs of that roof.

I would also want to know age of RTU, and have limits on your costs.  I know many leases with national tenants had terms like "tenant will maintain a routine maintenance contract on RTU. Beyond maintenance, tenant is responsible for repairs up to $5,000".  Again, you should not be paying for a 15-20yr life RTU and then just "give it" to the landlord when you leave the space.